The long-term goal of this project is to elucidate the molecular mechanisms controlling embryonic development of the digestive system. This will have a broad and significant impact on our understanding of human GI malformations, inform strategies to direct the differentiation of stem cells and provide new fundamental information on cell signaling in development and disease. Digestive system development is regulated by a series of growth factor signals between the endoderm and mesoderm, which are only partially understood. The fundamental mechanism of GI development are highly conserved between mammals and other vertebrate species and our previous studies using the experimental advantages of Xenopus embryos has helped inform strategies to induce human intestinal tissue from stem cells. Despite recent advances, fundamental gaps in our understanding of how foregut and hindgut progenitors are specified remain. In particular how the extracellular environment regulates combinatorial signaling dynamics at different stages of GI development, and how transcriptional specificity in response to these signal is achieved are largely unknown and the focus of this proposal. Our preliminary studies support the hypothesis that Secreted Frizzed Related Proteins (Sfrp) regulate the extracellular Fibronectin matrix to promote BMP signaling by a novel mechanism, and that Sfrps coordinate signaling crosstalk between BMP and Wnt growth factors to pattern the endoderm into foregut and hindgut progenitors. Aim 1 will characterize the novel mechanisms by which Sfrps and Tolloid proteases modulate the Fibronectin matrix to regulate BMP signaling. Aim 2 will determine the mechanisms that coordinate BMP and Wnt signaling. Aim 3 will determine how differential activity of the BMP and Wnt signaling effectors Smad1 and beta-catenin are integrated on DNA cis-regulatory elements to control foregut versus hindgut transcription.